As De Beers Group, the world’s leading diamond mining and retail company, moves into “synthetic” diamonds, a question that naturally arises is: Will laboratory-grown diamonds overtake the real thing?

Lab-grown diamonds are nothing new. In fact, they have been on the market for decades, and sales have been growing in recent years. The market of lab-grown diamonds was valued at approximately US$16.2 billion in 2015 and is projected to grow at an annual rate of 7.4% between 2016 to 2023, according to Research Nester, a global service provider for strategic market research and consulting based in New York.

By comparison, the real diamond market grew just 2% in 2017 to US$82 billion, according to De Beers Group’s Diamond Insight Report 2018.

Even with such a sizable market and growing pace, the authenticity and even the pure existence of lab-grown diamonds have been disavowed by major diamond industry players, including De Beers previously.

But De Beers changed its long-held position in May, when it announced the launch of Lightbox Jewelry, a subsidiary that will market a new brand of lab-grown diamond jewelry, at JCK Las Vegas, the jewelry industry’s most important trade show.

According to De Beers CEO Bruce Cleaver, “Our extensive research tells us this is how consumers regard lab-grown diamonds—as a fun, pretty product that shouldn’t cost that much—so we see an opportunity here that’s been missed by lab-grown diamond producers.”

Consumers, especially millennials, often seek out “ethical diamonds,” stones sourced without harming workers or the environment. Several producers, like De Beers, have gone out of their way to detail how they source their diamonds to alleviate these concerns.

But interest in ethical diamonds is not propelling the lab-grown trend, experts say. A bigger reason is simply the dwindling supply of diamonds in the world.

While De Beers’ decision might serve as evidence that lab-grown diamonds are here to stay, naturally mined diamonds will likely maintain their dominance in the market, experts say.

“Historically, there have been man-made emeralds, rubies, and sapphires parallel to the natural gemstone markets. However, natural gemstones will always, over time, appreciate more in value. I suspect the same thing will happen with diamonds,” says Tom Moses, executive vice president at Gemological Institute of America, which grades and certifies natural gemstones as well as synthetic ones.

There is a real place for lab-grown diamonds in the market because they are highly accessible to more consumers, says Celeste Lee, a consumer trend and branding expert.

“Lab-grown diamonds are identical to the real diamonds chemically, visually, and structurally,” Lee says. “Consumers can see precisely the sourcing, choose the color and the design they have dreamed of owning without spending a fortune.”

While natural diamonds can cost anywhere from US$1,000 to US$20,000 per carat, prices for lab-grown diamonds go for US$2,000 to US$6,000 per carat. De Beers is cutting the retail price for its lab-grown diamonds to about US$800 per carat.

For some diamonds of rare colors, the real thing is just out of reach to most consumers, Lee says.

“I would like to have the joy to have a pink diamond. The reality is I will never be able to afford the Pink Legacy Diamond that will be auctioned for at least US$30 million,” she says. “In my opinion, there are trade-offs between owning natural and lab-grown diamonds, but there is definite superiority in natural, (or “real”) diamonds, as they hold a unique, irreproducible value.”

Generally speaking, De Beers entering the lab-grown market is a boon to the fast-growing sector, as more industry standards are expected to develop and consumers develop more confidence in the products, Lee says. However, it’s still too early to tell how the dozens of lab-grown diamonds companies, which mainly market and sell their products online, will be affected.

For now, one thing for sure is that De Beers will not entirely shift its focus from its core diamond business.

“We think the Lightbox brand will resonate with consumers and provide a new, complementary commercial opportunity for De Beers Group,” Cleaver says.

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